Some of the hottest web startups have been child-shuttling services such as Shuddle and HopSkipDrive. It's very inefficient for each parent to drive every single child to each activity. It usually doesn't take very long for new parents to start working with others on carpooling, especially when there are conflicting activities in different places all at the same time.
A similar problem/solution exists in the online world as well. If an individual subscriber has an account for Facebook, Twitter, Instagram, Netflix, etc., it's very inefficient for each cloud service provider to go through their network to an Internet exchange point, through a point of presence, and sometimes across a national or even global backbone and back again, all to serve that single user. It makes much more sense for Internet content and cloud services providers to directly connect to one another for subscriber sharing. Yes, they're competitors, and yes, their subscriber information is proprietary and not for sharing, but when two servers are near each other in San Francisco, it makes no sense to have their packets travel the world to connect together.
This direct connection between competing service providers for subscriber sharing is called "peering", and it's nothing new. Early train stations housed competing railroad companies so that passengers could be swapped over. Before the digitalization of voice calls, long-distance phone companies maintained peering centers where calls were handed off between providers to optimize circuits. Financial exchanges maintain large peering centers where customer orders are traded like the shares themselves. And now peering has come to data centers.
The hottest trend in data centers today is not all the newfangled wunderboxes that cram transport optics into server chassis, but rather peering centers. It's well known that cloud providers are building massive new mega data centers. These receive a lot of press attention. Less talked about though are the shared peering centers that are being built. A peering center is typically sponsored by one cloud vendor, much the same way that a major department store will anchor a new shopping mall. Then floor and rack space is leased out to both partners and competitors. While the inside and outside of a data center and peering center may look identical, the main difference is how servers are connected to each other. Rather than all being connected within a single computing cluster, in a peering center the integrity of the individual private clouds must be preserved. A Facebook subscriber might be directly connected to a Netflix video, but Facebook's and Netflix's private networks are not directly connected. Peering takes place for the sake of efficiency. But, for reasons of security and competition, there is never direct sharing.
The actual process of peering within an exchange is complex. You have two routers on separate networks that have to be connected, but selectively, with security maintained. For many peering centers, this is still a manual process where a system administrator has the two network routers up on two screens, side by side, and commands are entered at the command prompt. Pre-written scripts and templates help but, when faced with setting up hundreds of peering connections at once, the process is still time consuming and prone to human error. Screen scraping routines have been used. These emulate the human sysadmin reading both screens simultaneously and responding accordingly. But where do you put your password if both screens are being scraped? The best solution is to use the Network Configuration Protocol, a network management protocol developed and standardized by the Internet Engineering Task Force that allows automated setup of complex peering arrangements between interconnected networks (among other things).
However, more than packets travel over peering connections; money flows as well, as each packet represents a piece of the revenue pie. Peering can be on a settlement-free basis, in a you-scratch-my-back-I’ll-scratch-yours arrangement. Or, peering can be paid, where one provider compensates another to use their prefixes, routes, and customers. Fully paid peering is where everything is shared and exchanged, though this is typically known as "transit", since essentially one provider is paying another to move their traffic from point A to B. Peering agreements have moved more into the public limelight recently as providers have haggled over price. Like owner/player sports spats that shutdown the sport while both parties negotiate, consumers have sometimes been deprived their favorite shows while peering agreements were re-negotiated. With billions of dollars at stake, even a small change in the terms of a peering agreement can mean millions in additional or lost revenue.